Football is just business

I recently wrote a post on a Romanian sports site about trying to apply an IT process to find the root cause of a football problem. I will try to make a summary here since the post that I wrote is in Romanian.

It’s about Liverpool FC and it essentially starts from 4 facts about Premier League (PL) football:

Modern football is a business. There are revenue streams (media, commercial, match-day), expenses (squad, facilities, etc), assets (the players and the staff) and risk management governing the entire process. In order to survive, a business needs to turn a profit.

For the Top 6 PL teams, the main source of revenue is the participation in Champions League (CL). The difference between finishing 1st and 6th in PL is few million pounds (basically peanuts), while missing out the Top 4 (ensuring CL participation) could have significant financial impact. Example – Liverpool reaching the CL final last season meant that their profits tripled compared to the previous year.

Every business has a vision, and a strategy for implementing the vision. The vision means the desired future position, while the strategy is a long-term plan to implement the vision. To implement the overall strategic plan, a shorter-term, tactical plan might be needed – easier to monitor and coordinate.

Higher ambitions means higher risks. It all depends on the risk appetite of the business.

With these facts in mind, I try to make a root cause analysis of the reasons why Liverpool seems to lose pace in the recent period. Many supporters see the recent transfer window as a missed opportunity. Despite several injuries, in January 2019 the club was still on the 1st place with several points advantage. You would expect a club to strengthen from a position of strength. It didn’t, and the takeaway is that the vision of the club is different from the vision of the supporter. While the supporters would aim to win the PL, the club vision is to maintain a sustainable growth and sound financial management. This can be done by remaining in the Top 4 (virtually achieved at this stage of the season) and staying in CL for as long as possible. Aiming for the first place would involve bringing in new players, which introduce additional costs and risks. Higher ambitions means higher risks, which are not necessarily accepted by the business.

In these conditions, winning the PL would be simply a happy side-effect.

In the end, I touch on two more things. First, having the realization above made have a more relaxed approach in supporting Liverpool FC. I understand that my expectations are not necessarily aligned with the club priorities, and therefore I have to manage these expectations. For the first time in the last few years, last weekend I decided to skip watching a Liverpool game and enjoy some time with the family:

Time to chill

The second point is that I am getting a little bit annoyed with the extremists-optimists supporters on social media. This tweet is spot on:

Bit condescending to call others pricks just because they don’t share your optimism. When you’ve gone from 7pts clear to 1pt, I think it’s perfectly acceptable not to be so positive!

Nobody is denying the progress Liverpool made since Klopp took over. I fully support him and I think he’s a perfect match for the club. In any other season, having 66 points after 27 games would virtually guarantee you winning the league. But that doesn’t mean that we can pretend things are going great: Liverpool won a single game from the last 5, it’s definitely not the right time to celebrate being first of the league with a mere point ahead of the second place, when all the bookmakers and predictive models predict that Liverpool will finish second. Hypothetical statements such as ‘if you would have known this at the beginning of the season…‘ don’t go anywhere and tend to focus more on the past rather than the future.This is the political correctness applied to football.

Conclusion: doing a root cause analysis using the 5 whys to find why Liverpool is no longer favorite to win the PL leads to the following results:

Why? Because the squad is not good enough to fight the financial giant currently on the 2nd place

Why? Because there are big differences between the starting XI and the bench

Why? Because the club did not bring in enough players during the last 2 transfer windows

Why? Because it was not needed; finishing in Top 4 is virtually guaranteed

Why? Because football is a business and trophies are just a caprice of the supporters